In the latter half of the afternoon, the Appropriations Committee was joined by the Committee on Energy, Utilities, and Technology to review the impact of the Governor’s budget on:

Efficiency Maine Trust

The Governor’s Energy Office

The Public Advocate, and

The Public Utilities Commission

Major Issues

Accident – Sickness – Health Insurance. This is the Fund used to administer the State Employee Health Plan and the Retiree Health insurance program.

As the result of a miscommunication, state employees attended the public hearing with the understanding that the State Health Insurance Plan and Retired State Employee Health Insurance were before the Appropriations Committee, today. The health insurance plans come before the Appropriations Committee on April 2, 2013.

The Appropriations Committee provided time for some state employees to testify with respect to Active and retired state employee health Insurance plans, and on April 2, other state employees will testify with respect to this health plan.

The health insurance plans for active and retired state employees have been flat funded for three years, and the Governor’s budget continues flat funding for the 2014-2015 Biennium.

As a result, deductibles and co-payments have continued to increase, while, at the same time, merit pay, COLAs, and longevity payments have been eliminated. State Employees, both active and retired, have seen their incomes reduced, which will continue to be reduced over the next two years. This issue is of great concern to active and retired state employees.

Dirigo Health. Dirigo Health comes to an end on December 31, 2013. A question arose with respect to coverage for claims for health care services incurred in the month of December, but not processed until sometime in 2014. All medical and health care procedures incurred in December will be covered. The projected costs have been assumed in the rates.

Bureau of Insurance and the “Insurance Rate Hike” law, PL 90 [LD 1333]. LD 1333, PL 90, exempts from rate control by the Superintendent of Insurance, rate hikes of less than 10% in the individual and small group markets. The question was posed whether there is any review of rate hikes in these insurance markets, and the Committee was told that the Superintendent may review, but not prevent rate increases in policies sold or issued in these markets.

Bureau of Consumer Credit Protection – Foreclosure Prevention Program. As a result of a question posed by the Appropriations Committee, The Commissioner of the Department of Professional and Financial regulation revealed that the Foreclosure Prevention Program received $1 million out of the $5.9 million awarded to the State of Maine – Attorney-General’s Office by the federal courts as a result of improper and illegal foreclosure proceedings undertaken by banks and mortgage insurance companies. Despite the $1 million provided to the foreclosure prevention program, the Commissioner indicated that the additional funds did not change or impact the budget submission in any way.

Indigent Legal Services. This has been an issue for years. Funding has been insufficient to pay legal fees to lawyers to whom defendants with little or no assets have been assigned by the courts. The lawyers have to wait months for payment, and the $50 per hour payment fee is often insufficient to cover their costs. The Supplemental Budget passed earlier this year requested the Governor to provide Indigent Defense with funding to cover the state’s debts owed to these lawyers.

Judiciary. One major issue for the Court System has been the need for more screeners in the courts to prevent any violent occurrences in the courts. A second issue is the salaries paid to judges that the Chief Justice claims are among the lowest in the nation.

Insurance and Financial Services (IFS)

The portions of the Governor’s budget relating to the jurisdiction of the Insurance and Financial Services committee may be found here.

Department of Administrative and Financial Services (DAFS)

Acting Deputy Commissioner Terry Brann presented testimony outlining the portions of the budget under the purview of the IFS committee related to DAFS (testimony of Acting Commissioner Brann.)

The largest initiative relates to the Accident-Sickness-Health Insurance Program.

Dirigo Health Agency

Karynlee Harrington, Executive Director of the Dirigo Health Agency presented testimony on her agency. Dirigo Health plans to terminate on December 31, 2013 with the expiration of the health access payment.

Professional and Financial Regulation (PFR)

With respect to portions of the Governor’s budget related to the IFS committee:

Consumer Credit Protection,

Financial Institutions,

Insurance, and

Securities

Commissioner Anne Head returned to present testimony. Questions for Commissioner Head centered on the Foreclosure Prevention Fund with the Bureau of Consumer Credit Protection. The State was recently the recipient of nearly $7M as a result of the national foreclosure practices settlement. The majority of this settlement, $5.9M, was earmarked for the General Fund (GF) through the Attorney General’s Office. $1M was deposited in the Foreclosure Prevention Fund.

Returning at 1:00 PM the committees were joined by Attorney General Mills (Testimony of AG Mills) on the portions of the budget relating to her office.

The Governor’s proposal to transfer $600,000 from the AG’s Office to his own legal contingency fund received significant discussion. AG Mills noted that in research 30 years of AG’s Office budgets she could find no precedent for this proposal regardless of the occupant of either the Governor or AG’s offices. This proposal would reduce the Attorney General’s All other account to half of the amount spent in this account 10 years ago. This account is used to pay for expert testimony in homicide cases and other major crimes, computers, telephones, investigators’ travel, law books, postage and supplies.

The AG concerned that this proposed expenditure by the Executive Department violates Title 5, Section 191 and undermines the independence of the Department of the Attorney General.

The committee’s asked for more information on the Victims Compensation Fund regarding its revenues and uses.

AG Mills was followed by the State’s Chief Medical Examiner, Dr. Margaret Greenwald, (testimony of CME Dr. Greenwald.) Dr. Greenwald raised concerns about the underfunding of local Medical Examiners and the need for 2 additional MedicoLegal Death Investigators. The Governor’s budget provides a fee increase to address the reimbursement of local Medical Examiners. No provision is made in the Governor’s budget to provide additional MedicoLegal Death Investigators.

These delays have resulted in delayed funeral plans and in warm weather, decomposition.

Human Rights Commission

Executive Director Amy Sneirson presented testimony on the portions of the Governor’s budget related to the Maine Human Rights Commission.

Robert Lingley, the immediate Past President of the PTL Board of Directors, presented testimony on that organization’s portion of the budget.

Maine Commission on Indigent Legal Services (MCILS)

David Mitchell, Chair and John Pelletier, Executive Director of MCILS presented testimony in response to the Governor’s budget. They highlighted the initiative to increase compensation for court appointed legal counsel. The rate has not been increased since 1999. The Governor’s budget proposes a $5/hour increase. Their ask of the Appropriations and Judiciary committees was to provide full funding beyond the Governor’s proposal.

The $50.00 rate has gone untouched for fourteen (14) years, and the Commission has by rule increased the rate to $70.00 per hour beginning in Fiscal Year 2014 and to $75.00 per hour beginning in Fiscal Year 2015.

Michael Cianchette, Chief Legal Counsel to the Governor, presented the Governor’s position that the proposed reimbursement increase is “a step in the right direction.”

Patrick Woodcock, Director of the Governor’s Energy Office presented testimony on the portions of the budget relating to the Energy Office.

Public Advocate

Dick Davies, Public Advocate, presented testimony outlining the portion of the budget relating to his office.

Public Utilities Commission (PUC)

Tom Welch, Chairman of the Public Utilities Commission presented testimony relating to the Governor’s budget and the PUC.

Schedule

Monday, March 18th at 10:00 AM AFA will reconvene and be joined by the Education and Cultural Affairs committee for presentation of the portions of the Governor’s budget dealing with K-12, Adult and Higher Education as well as the State’s cultural agencies.